100 hour moving average also tested
The USDJPY fell below a rising trend line around 105.918 level (and the low from yesterday) and moved to test the breakout level from Wednesday's trading at 105.80. That level corresponded with the swing high going back to September 30. Recall the USDJPY at traded up and down in a trading range over a 10 day period prior to the break on Wednesday. Traders found support against that level on the 1st test today.
The USDJPY price corrected higher in the early European session today, and retested the underside of the broken trend line. Holding that level, gave sellers the go-ahead to rotate back to the downside.
The price of the pair, is currently trading just above the rising 100 hour moving average at 105.822 and the old swing high at 105.80
The high for the week (also on Wednesday) reached 106.10. Now that was only 30 pips from the break point. So buyers weren't exactly racing the pair higher on the break. In fact in trading yesterday, the USDJPY only traded in a 17 pip trading range. The New York session was only 11 pips. The buyers and sellers did not know what it wanted to do.
The move below the trend line today does give sellers a victory. However, a move below the 100 hour MA and the swing highs at 105.78 and 105.80 from October 5 and September 30 are needed to refute the bullish break and give sellers more control. Absent that, and the buyers chalk up a win with hopes for a run back toward the highs for the week.
